26 questions and answers about the P&L
COSTS, P&L AND ACCOUNTING, AFFILIATION AND COMMERCIAL CHANNEL, BUSINESS MODEL AND PRICING, MARKET AND EXPANSION, OPERATIONS AND INTERNAL RELATIONS
ONLINE
COSTS, P&L AND ACCOUNTING
1. What are the key direct costs?
Payments to instructors/mentors and CAC. Affiliate/partner commissions and variable delivery costs (events, content) are also added.
2. Which items make up fixed OPEX (overhead)?
Internal payroll, technology/platform (SaaS), administrative and legal expenses, support, and brand marketing not tied to CAC.
3. How do you treat CAC in the P&L?
As a variable direct cost, recognized in the same period as the revenue from the acquired student.
4. Do you capitalize any content or technology expenditure?
Yes. Technology CAPEX and premium-content investments are capitalized on the balance sheet and amortized straight-line in the P&L.
5. Do you include provisions for refunds or incidents?
Yes, when there is risk of reimbursements or unfulfilled services. Refunds for justified student dissatisfaction are covered with free classes (no CAC), and cancellations are provisioned at 1% of total revenue.
6. How are marketing expenses allocated?
CAC is treated as a direct cost; branding/communications go into OPEX.
7. Are there any extraordinary items in the P&L?
None in the base scenario.
8. How does seasonality impact the P&L? Can OPEX be reduced?
Sales spike during launches/cycles; OPEX remains relatively stable. It can be reduced by up to 30%.
9. Is there FX risk in the P&L?
Base currency is EUR; FX risk only arises in international franchise expansion scenarios.
10. Which KPIs link operations and the P&L?
Organic course sales (no CAC), average revenue per student, average CAC per student or sales milestone, and instructor cost per student/hour.
11. How do you allocate shared costs across business lines?
Using drivers such as time, users, traffic, or requests to allocate tech, marketing, support, and administrative expenses.
12. How are VAT and other indirect taxes handled in the P&L?
They are netted off; not shown as operating revenue or expense.
13. Where is the LTIP shown?
On a specific line (“LTIP accrued expense”), separate from payroll to avoid duplication.
14. Why is LTIP placed after “EBITDA before LTIP” and before amortization?
To present a “clean” EBITDA first, then adjust for LTIP, and finally deduct amortization to arrive at EBIT.
15. How are bad debts or delinquent accounts treated?
Low risk due to advance payments; provisions are made only if payment plans or B2B credit are offered.
16. What type of P&L is presented in the deck?
A simple accrual-based model, without cash-flow timing or payment schedules, and without amortization (expenses recorded when paid).
AFFILIATION & SALES CHANNEL
17. How are affiliate commissions managed?
As a direct CPA-style cost, tied to the sale generated and tracked via a 30-day affiliate cookie.
18. How does community growth affect CAC and organic sales?
A larger community yields more organic sales and a lower blended CAC. No viral-growth effects are modeled for prudence.
19. If viral growth isn’t modeled, why does CAC fall for free members?
Due to operational efficiency and brand recognition: optimized channels and Sabio Valley’s heightened visibility.
20. What role does the affiliate channel play in the P&L and international expansion?
The CPA model reduces CAC risk and facilitates global reach. Sabio has in-house affiliate experts (including the CEO).
BUSINESS MODEL & PRICING
21. What pricing assumptions and product mix are used in the P&L?
Conservative estimates per line (courses, mentorships, events, premium content) and a mix based on expected traction; improvements modeled in scenarios.
22. What pricing models does Sabio Valley employ?
Monthly membership (free content access plus discounts) and pay-per-service (courses, events, premium content, etc.).
MARKETS & EXPANSION
23. Which markets do the P&L figures cover?
The Spanish-speaking community worldwide: Spain, LATAM, and the U.S. Hispanic market. Projections are in euros.
24. Are franchise income streams included in the P&L?
No. The base model excludes them. If activated, HQ payroll would increase by approximately 20%.
OPERATIONS & INTERNAL RELATIONS
25. How does working capital behave?
Positive: advance customer payments and month-end payments to instructors/CAC.
26. Are there intercompany transactions in the model?
None in the base scenario. If they occur, they are documented and eliminated on consolidation.